This preview of weekly data examines USOIL and XAUUSD, with economic data expected later this week as the primary market drivers of the near-term outlook.
Highlights of the week: US inflation & PPI, UK GDP growth
Tuesday
- The US Inflation rate at 12:30 GMT, where the consensus is for an increase of around 0.1%, reaching 3.4% for April. If this is broadly accurate, then it might not influence a change in the stance of the Federal Reserve at their next meeting, where the probability for now is that they will keep the rates stable with a chance of 96%. If there is any significant surprise change in the actual figure, then it will respectively affect the dollar in the short term.
Wednesday
- U.S. Producer Price Index (PPI) at 12:30 GMT. Market participants are expecting the figure to remain stable at 0.5% for April. If this is confirmed, then it could potentially indicate that inflation might slow down on the next reading as producers’ costs usually roll down to consumers, pushing inflation figures to the upside, while if they remain stable, it could be hinting that inflation might not increase in the near-term outlook.
Thursday
- British GDP growth at 06:00 AM GMT. The market consensus is that the figure will decline from 0.5% to -0.2% month over month. This might not have a major effect on the pound since it is for March, and it might already be priced in the market; however, it would provide some hints on the overall economic performance of the British economy.
USOIL, daily
Oil prices climbed after Donald Trump rejected Iran’s response to US peace proposals, calling it “totally unacceptable.” Iran had reportedly demanded an immediate end to the conflict and guarantees against further US-Israeli attacks. Markets remain focused on the Strait of Hormuz, which has been largely shut since the war began, disrupting global energy flows and raising supply concerns. Despite the loss of nearly a billion barrels, prices have remained relatively contained thanks to strong US exports, weaker Chinese imports, and expectations that the Strait of Hormuz will eventually reopen. Despite an ongoing ceasefire, uncertainty around negotiations continues to support energy prices. Major producers have benefited from the rally, with Saudi Aramco reporting stronger earnings as higher prices boosted revenues.
On the technical side, the price found sufficient support on the 38.2% Fibonacci retracement level late last week and has since corrected to the upside. Currently, it’s testing the support of the combination between the 23.6% Fibonacci and the 50-day simple moving average. If the current level holds and the price keeps rising, the next area of technical resistance might be around $100, the psychological round number, and also an area of price reaction on multiple occasions over the past month. The Stochastic oscillator is in neutral levels, indicating that there is potential for moves in either direction, while the Bollinger Bands are quite expanded, showing that there is sufficient volatility in the market for potential sharp moves in the short term.
Gold-dollar, daily
Gold fell as Donald Trump rejected Iran’s latest peace proposal, increasing concerns that tensions in the Middle East could drag on and keep inflation elevated. The move pressured gold as traders scaled back expectations for interest rate cuts, which are typically supportive for non-yielding assets. Markets remain caught between geopolitical uncertainty and rising inflation fears, while the lack of progress in negotiations raises the risk of further escalation or prolonged stalled talks. Upcoming US inflation data is now in focus after recent economic figures showed a resilient labor market, giving the Federal Reserve more room to keep rates higher for longer. Attention is also turning to the end of Jerome Powell’s term as Fed chair, with investors watching closely for any shift in the central bank’s independence or policy direction.
From a technical point of view, the gold price has rebounded from the support of the lower band of the Bollinger Bands and has since corrected to the upside. The moving averages are validating the overall bearish trend in the market, while the Bollinger Bands are somewhat contracted, showing that volatility is drying up. The Stochastic oscillator has retraced from the move towards overbought and is now at neutral levels. Currently, the price is testing the resistance of the 50-day simple moving average, and with no clear indication of bullish moves, it might continue declining if no major catalyst arises. If this scenario plays out, then the price could retest the psychological support of $4,500 in the near short-term.
Disclaimer: The opinions in this article are personal to the writer and do not reflect those of Exness or Finance Feeds.